Sprint Nextel shares rose Thurday amid reports that the third-largest cell phone company is in talks to be bought out by Japanese-owned Softbank Corp. The Sprint Nextel deal would be valued at more than $12.8 billion.

ByThe Associated PressOctober 11, 2012

Dan Hesse, CEO of the Sprint Nextel Corporation, addresses attendees during the International CTIA WIRELESS Conference & Exposition in New Orleans in this May 2012 file photo. Japan's Softbank Corp is in talks to acquire a majority stake in Sprint Nextel, the No. 3 wireless carrier in the United States, for more than 1 trillion yen, it was reported October 11, 2012.

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New York — Shares of Sprint Nextel Corp., the third-largest cellphone company in the U.S., hit their highest level in a year on Thursday following a report that it's in advanced talks to be acquired by Japanese cellphone company Softbank Corp.

The Wall Street Journal, citing an unnamed person with knowledge of the talks, said Thursday that the potential deal would help Softbank Corp. expand outside of Japan. It put the value of the transaction at more than $12.8 billion.

Sprint had a market capitalization of $15 billion at Wednesday's close, implying that Softbank may not buy the whole company.

Analysts expressed surprise at the news. There has been frequent talk of Sprint buying other U.S. cellphone companies to help it turn around, but an acquisition by a Japanese company wouldn't do much to help its competitive position in the U.S.

"We would expect to see very little synergies created with such a transaction," said Stifel Nicolaus analyst Christopher King.

Last week, media reports said Sprint's board was considering a bid for MetroPCS Communications Inc., the fifth-largest cellphone company in the U.S., to counter an offer by T-Mobile USA, the No. 4. The T-Mobile-MetroPCS deal could make the competitive situation even more difficult for Sprint, which has been losing contract-signing subscribers for years.

Tokyo-based Softbank, once the underdog in Japan's telecom industry, has seen its fortunes improve ever since it started selling the iPhone in 2008. It was initially the only Japanese phone company to offer the iPhone. Rival KDDI Corp. started selling the iPhone late last year.

Shares of MetroPCS dropped 58 cents, or 4.7 percent, to $11.46 in morning trading, as investors speculated that Softbank's interest means there's less of a chance for a counterbid from Sprint.